US dollar extends gains vs yen at start of Trump-Abe news conference

The dollar gained on Friday on expectations of a constructive meeting between PresidentDonald Trump and Japanese Prime Minister Shinzo Abe, while Trump's comments on tax reform Thursday continued to support the greenback.

Expectations that Abe could signal increased Japanese investment in the United States underpinned optimism surrounding the meeting between the two leaders, while Trump's promise on Thursday of a "phenomenal" tax reform plan over the next two or three weeks continued to support the dollar against most of its major rivals.

The euro touched $1.0608, its lowest level against the dollar since Jan. 19, while the dollar extended gains against the yen at 113.55 yen, at the start of a Trump-Abe news conference.

The dollar index, which measures the greenback against a basket of six major currencies, rose as much as 0.3 percent to an 11-day high of 101.010. The index later pared gains and was last up about 0.2 percent at 100.85.

While Trump may discuss his concerns over a strong dollar with his Japanese counterpart, it is expected that whatever is said publicly after the meeting will focus on trade and investment deals.

There was little expectation Trump would reiterate his recent accusation that Japan was one of several countries devaluing their currencies to the disadvantage of the United States.

"It looks as if Abe is coming in determined to maintain the U.S.-Japan relationship," said Steven Englander, global head of G10 FX strategy at CitiFX in New York. "It would be a big surprise if Trump were to complain about dollar/yen."

Trump's tax promise on Thursday, made during a White House meeting with airline executives, continued to calm some of the nerves that have dominated currency markets for weeks and put the focus back on Trump's efforts to boost economic growth. That reinvigorated dollar bulls.

"This was seen as a pivot back to the economic agenda," said Vassili Serebriakov, currency strategist at Credit Agricole in New York, in reference to Trump's statement on tax reform. "Today is a continuation of that move."

Dealers also said Trump's backing down on surprise early criticisms of China's "One China" policy helped boost risk appetite globally.

The dollar hit its lowest level against the Russian rouble since late July 2015 of 58.4486 roubles. Englander of CitiFX said gains in oil prices on Friday boosted the rouble given Russia's role as a crude exporter.